Correlation Between United Rentals and JSC Halyk
Can any of the company-specific risk be diversified away by investing in both United Rentals and JSC Halyk at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining United Rentals and JSC Halyk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and JSC Halyk bank, you can compare the effects of market volatilities on United Rentals and JSC Halyk and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in United Rentals with a short position of JSC Halyk. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and JSC Halyk.
Diversification Opportunities for United Rentals and JSC Halyk
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and JSC is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and JSC Halyk bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JSC Halyk bank and United Rentals is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on United Rentals are associated (or correlated) with JSC Halyk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JSC Halyk bank has no effect on the direction of United Rentals i.e., United Rentals and JSC Halyk go up and down completely randomly.
Pair Corralation between United Rentals and JSC Halyk
Assuming the 90 days horizon United Rentals is expected to generate 1.18 times less return on investment than JSC Halyk. But when comparing it to its historical volatility, United Rentals is 1.15 times less risky than JSC Halyk. It trades about 0.13 of its potential returns per unit of risk. JSC Halyk bank is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,630 in JSC Halyk bank on August 29, 2024 and sell it today you would earn a total of 170.00 from holding JSC Halyk bank or generate 10.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Rentals vs. JSC Halyk bank
Performance |
| Timeline |
| United Rentals |
| JSC Halyk bank |
United Rentals and JSC Halyk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and JSC Halyk
The main advantage of trading using opposite United Rentals and JSC Halyk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, JSC Halyk can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in JSC Halyk will offset losses from the drop in JSC Halyk's long position.| United Rentals vs. 24SEVENOFFICE GROUP AB | United Rentals vs. Corporate Office Properties | United Rentals vs. MTI WIRELESS EDGE | United Rentals vs. CITY OFFICE REIT |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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